Can you believe Xbox Live, the online arm of Microsoft’s Xbox 360 video game console, turns five tomorrow? Neither can we. That being said, this is a shining example of an area where Microsoft held on to become a dominant force in a vertical category. To celebrate this crowning moment several announcements were made which should make things even more interesting.

For starters, Microsoft is giving away for free between 12:01 a.m. PST on Nov. 15 and 11:59 p.m. PST on Nov. 16 an Xbox Live Arcade game for download. Of even bigger interest to gamers, particularly fans of the original Xbox, is word of a free system update which will offer, among other enhancements, the ability to purchase and download original Xbox games. These Xbox Originals look to initially include Halo,” “Psychonauts,” “Crimson Skies: High Road to Revenge” and “Fable,” among others.

Suppose you own a company that both Microsoft and Google want to own a part of. Who do you choose to do a deal with? Do you base your decision on which company you think will be the stronger in the future or just on who’s offering the most cash? This is the present dilemma that Facebook owner Mark Zuckerberg is facing right now. Both Google and Microsoft are neck-and-neck with striking a deal that would see either one of the two online titans getting a 5-to-10 percent ownership with Facebook. The deal is expected to close sometime today or tomorrow.

The potential deal is likely to be huge for whomever gets it. Both Microsoft and Google are set up to capitalize on serving advertising to Facebook’s 34 million members. No one from either of the three companies is offering to comment about the deal but if the “The New York Times” is reporting that it exists, take it to the bank.

Microsoft said today it is launching a specially branded, limited edition Zune “produced in collaboration with Latin Grammy-nominated artists Wisin y Yandel.” This particular Zune will price around $200 and is for sale exclusively through Wal-Mart.

The Wisin y Yandel Zune is black, stylized and comes in in customized Wisin y Yandel packaging. It sports a 30 GB hard drive pre-loaded with the new Wisin y Yandel 19-track album, “Wisin vs. Yandel: Los Extraterrestres.” This portable media player has a three-inch color display and can store up to 7,500 songs, 25,000 pictures or 100 hours of video.

Today Microsoft has officially launched the next-generation Zune media player which consists of three new models launching in November, two of which house flash memory. The release also brings updates to the Zune Marketplace and an associated online social networking site centered around the player and sharing music.

The rumors leaked yesterday turned out to be pretty accurate for the most part. Microsoft is releasing two flash memory-based players in 4GB and 8GB capacities that look similar to the new Nano’s and will retail for $149 and $199 respectively, which is also similar to Apple’s Nano pricing. There is also an smaller, thinner 80GB Zune with a hard drive that will retail for $249 which comes only in black and has a 3.2-inch display. The flash-based models come in black, red, green and pink, no more brown.

As the launch of the second generation Zune, or Zune 2, from Microsoft nears the rumors are flying at full steam regarding pricing and the features that the new media players will house. From what we’ve ascertained the launch is scheduled for October 3rd at midnight and will bring three new models of the Microsoft Zune player along with new features and content on the Zune Marketplace (iTunes for Zunes).

Along with some FCC leaks showing 4GB and 8GB flashed-based Zunes (codenamed “draco”), ZuneScene has the skinny on pricing along with some additional juicy details. These are still in the rumor stages mind you, but it looks like a new 80GB version will be going for $249 with an 8GB model going for $199 and a 4GB model for $149. The 8GB and 4GB models are expected to come in black, red, green or pink but the thinner 80GB will come in only black.

The first rumor of a new Zune in development came our way in June and then last week a photo suggesting that a second version Zune was soon to be a reality surfaced. Now comes the biggest bit of gossip yet about the reality of Zune 2 courtesy of Zune Scene: their inside source tells them that Zune 2 will go on sale starting October 16. Isn’t that less than one month away? Hey Microsoft, you better wake up and announce this thing officially or are you just waiting until that wave of “Halo 3″ mania passes us by?

Zune Scene further establishes that the new Zunes will come in 4GB, 8GB and 80GB versions and that they will be available in red, black, pink and a green that best resembles the one found on …

Microsoft has announced the launch of its new Bluetooth Notebook Mouse 5000 designed for use with notebook computers providing wireless mousing without the need for any transceiver sticking out of your USB port.

According to Microsoft, over half of the notebooks shipping next year are likely to have Bluetooth built-in, and a wireless Bluetooth mouse makes connectivity even more convenient than a traditional wireless mouse that requires a separate piece plugged into your notebook to receive the signal.

FairUse4WM has been fairly well known for its ability to the Windows Media DRM and with its latest version 1.3 it boasts to be able to completely remove the digital rights management restrictions from songs purchased from the Zune Marketplace; a feat to which it was previously unsuccessful.

This, like most of these situations, will likely be short lived. Microsoft is undoubtedly already well on there way with a new version of software for the Zune to combat the latest FairUse4WM version. But, until then you can use this to release your songs from the DRM clutches. If you’re too late for this version you’ll likely get another chance, that is until Microsoft figures out who the heck “viodentia”, (the FairUse4WM author) is.

Microsoft released news of a new keyboard and mouse combination targeting those that are at the computer for extended periods of time and could benefit from a more ergonomic design. The Natural Ergonomic Desktop 7000 bundles the Natural Ergonomic Keyboard 4000 with the Wireless Mouse 6000 together for a $150 package that should hit shelves in July.

Both components of the ergonomic desktop connect through 2.4 GHz RF-wireless connections with a USB receiver. The keyboard keys has a winged design which according to Microsoft will give your hands a more natural position while typing, and the mouse fits your hand “as naturally as a handshake”.

The mouse has a number of nice features including 4-way scrolling, an instant viewer to navigate between open windows (Alt-Tab too tough?), a magnifier to catch that small print and a both pieces have a battery life …

On June 10th Microsoft will be releasing a watermelon red version of its Zune media player. The new red color will be sold exclusively through Target and Amazon, and it looks to possibly be a limited edition version like the pink Zune with it’s 100,000 unit cap.

This watermelon Red Zune version joins the original colors of brown, black and white along with the pink version and the upcoming Halo 3 Zune expected in September.

Aside from the new red color, the functionality of the Zune will be just like the others with a 30GB capacity, 3-inch screen, FM tuner and the wireless Zune to Zune sharing. If you’ve been holding out for a color that’s a break from the norm, here’s your chance.

A couple of weeks ago Microsoft started banning mod’d Xbox 360 game consoles from Xbox Live (just the consoles, not the user accounts). The modified consoles were able to play copies of games which Microsoft felt was not fair to everyone. Due to this Microsoft started detecting the game consoles when users would log on, and banning them from Xbox Live when found.

Now, in just a matter of days the hacker community has volleyed back to Microsoft with firmware called called iXtreme Firmware 1.0 which when installed will prevent Microsoft from detecting the modified game console and hence avoid any potential banning. I’m sure it’ll now just be just a matter of time until Microsoft retaliates. Game on!

Until recently Xbox 360 owners were able to download a firmware hack which allowed them to play backed-up games and essentially boot-legged copies of games on their game console. They were also able to participate with them on Xbox Live seemingly without any notice from Microsoft, but that appears to have changed.

Apparently with the recent Spring Update earlier this month and coinciding with the beta release of Halo 3, Microsoft has shown that they are able to detect and ban those consoles with modified firmware. When consoles with the modified firmware is detected users will receive an error code (Status Code: Z: 8015 – 190D). As a result, Microsoft is permanently banning modified console from the Xbox Live service, but they are not banning the individual user account. When trying to connect through the modified …

Now that the Simpsons have a new feature film heading for the big screen Fox has teamed up with Microsoft to make a shiny yellow Simpsons-themed Xbox 360 to help promote the movie. The 360 case and controller have been given a glossy coat of Simpsons-yellow paint along with a big picture of the top half of Homer’s head on the side.

For those of you that are Simpsons collectors or Xbox Collectors, actually getting your hands on one of these Simpson’s Xbox’s might prove to be difficult as Microsoft is only making 100 of them. The units that they do make will be used to be given out and different events and promotions for the Simpsons movie.

According to Engadget the Simpsons game will actually not be coming with the unit as you might think, and Microsoft has skimped a little bit on the …

Microsoft has released the Spring Update for the Xbox 360 which is now available for 360 owners to download through their console. The Spring Update promises to increases communications through integrating with Windows Live Messenger and cut down on downloads that are not intended for your geographical area.

With the Messenger compatibility, Xbox 360 owners will be able to add up to 600 Messenger contacts to their Live account in addition to the 100 gamertag contacts. Up to 20 contacts can be on the same conversation and as many as six conversations can be held at one time.

Some other features in the updated dashboard include achievement pop-ups that contain more details such as showing what the achievement was and it’s value right in the pop-up. Microsoft has improved on providing downloadable content, including the ability to watch …

Market Watch has recently identified a filing to the FCC by Microsoft which adds more fuel to the rumor mill about a potential Zune Phone. What makes this filing even more curious is the fact that Google Inc., Hewlett-Packard Co. and Intel Corp are also listed as taking part in submitting this device to the FCC.

Many speculators have written about a possible phone from Microsoft ever since the release of the iPhone from Apple. The thought is that Microsoft might try to take the same route with their portable media player that Apple did with the iPod, making some type of mobile phone from the Zune player. The difference being the iPhone is intended for cellular networks, while the rumored Zune Phone would be intended for a type of network based VoIP connection. The filing …